Citadel and Knight Report Losses on FB

The loss at Citadel Securities may be as much as $35 million, according to a person with knowledge of the firm, who asked not to be named because the information is private.

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Knight Capital Group Inc. (KCG), a Jersey City, New Jersey-based brokerage and market maker, said yesterday that it lost as much as $35 million trading Facebook because of the technical problems at Nasdaq.

Is it just me, or does anyone sense this could be a gradual sabotaging of US capital markets? How many individual flash crashes were there? Now the FB ipo? This destroys confidence and forces liquidity offshore, to other exchanges.

Unclear to me why this is getting so much press. "As much as" $35m isn't much money to a firm of Citadel's scale, and it's two orders of magnitude less than the recent JPM loss. It's an ordinary course of business type of loss. No one wins 'em all. I guess the media are hungry for anti-FB content at this point.

Is it just me, or does anyone sense this could be a gradual sabotaging of US capital markets? How many individual flash crashes were there? Now the FB ipo? This destroys confidence and forces liquidity offshore, to other exchanges.

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One site about some of the incredible things going on is deepcapture dot com. I am not sure if it is all true, but it is interesting reading.

Empires end because they are built on something ultimately unsustainable. One of the signs of a change is corruption showing up everywhere. That is not because there was no corruption before but because the regulation stops working because the leaders don't care about it. I think our society has lost its way.

One trader got lucky that his order didn't get executed. Another one, not so lucky.

His pals weren't so lucky.

"I'm kind of done," Mr. Hale said. After talking to the firm's risk manager, he sold out of his position near the day's low. So did other guys around him. They couldn't risk taking more losses. Mr. Hale lost $158,000, of which $85,000 was in his personal account. The rest were the firm's.